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Come in Spinner – How the Committee of the Old Brisbane Turf Club at Doomben Led Its Members Down the Garden Path Into a Merger With the QTC Across the Road at Eagle Farm – and Gave the Property Developers a Wet Dream

It’s been brought to my attention that certain former board members of the Brisbane Turf Club have been attempting to wipe away my recent revelations about the rot and the rorts in Queensland Racing by dismissing me as a half-baked fool.

I refer specifically to the former virologist turned Government bureaucrat Ross ‘the Tin Man’ Tinniswood, who has taken to Twitter late in life and has apparently been slagging me off all over town. That’s cool. Everyone has an opinion and they are entitled to voice it, and I’m not precious and can cop any size of sledge. To tell you the truth I sort of enjoy it, because it lets me know that I’m on the right track and cutting pretty much to the bone.

But I’ll tell you there’s one thing I don’t like and I won’t cop, and that’s bald faced liars who spread errant untruths in a craven attempt to lead everyone down the garden path, and in the process avoid any responsibility for the smoke and mirrors tricks they used to con their members into voting to merge the Doomben (BTC) and Eagle Farm (QTC) clubs, in the process laying the first stone of the crooked path along which racing totters today.

The Tin Man is just a silly vain cocksure old peacock flapping his pernicious plumes in the rancid wind, but we might as well deal with his bullsh*t now because no doubt other buck-shoving bullsh*t artists are waiting in the wind ready to rewrite the racing history book so their role in the confidence trick might be erased, and their personal legacies that exist only in their own heads might be preserved.

No f*cking chance chaps.

The historical records explode your rubbish into a thousand pieces and expose you for the bullsh*t artists that you were then, and that blokes like the Tin Man still are.

To lay the whole scam bare let’s first take a look at what the BTC members told their members when they leaned on them to merge in 2009 and contrast it with what they were told in the club’s 2007 annual report about 20 months beforehand, and take a close look at the 2008 annual report which is the hottest thing you have ever seen, and absolutely hooked so that the faked ‘dire’ financial situation would convince members that the merger was in their best interests.

Suckers.

This is what BTC members were told by their board in September 2007.

The Club has had a very successful financial year. The $1.5M profit is a pure operating profit with no provision write backs, asset sale gains or other non trading adjustments that increase our profits.

The Club continues to consolidate healthy profits that will provide a base for future enhancement to the facility and its ongoing viability. The club is in a very strong financial position with its cash and financial investments increasing to over $9M.

This is a first for the Brisbane Turf Club. Never has it held such a large reserve.

This is what the club members were told 20 months later in 2009.

The Doomben Racecourse has played an integral role in Brisbane Metropolitan Racing but Doomben’s very survival is at stake if we continue as a stand alone entity. BTC will suffer a loss for the 2007/08 financial year in excess of $1 million and its future viability as a race club is of serious concern to the Board.

BTC now operates in an environment where the competition for the entertainment dollar is intense – especially in a region like south-east Queensland where corporates and the public have a wide choice of sporting venues to attend. No longer can race clubs rely on wagering distributions and large crowds attending race days as they once did.

Bit of a difference isn’t it? There’s a catch though – the Committee Members deliberately ran down the revenue and used asset revaluations to drop it further. The people who ran the club WANTED it to look bad in order that they could strengthen their case for the merger and that’s exactly what they did – made it look bad.

I will tell you how in just a second, but first let’s have a look at a couple of other diametrically opposed statements that the BRC Directors made to members in the space of just two years.

Here’s what the Board told the club’s members in 2007.

The main work on our facility has been the refurbishment of the 10,000 Room in the Members Stand costing over $200,000. As mentioned the development application for the course has also been approved by the Brisbane City Council. Significant works were also undertaken to implement tanks, retrofit taps and toilets to meet water restriction guidelines and management plans. Other minor works were undertaken to equipment and fitouts.

Then here’s what they said in 2009.

Race clubs like BTC will not be able to provide first class facilities for members, racing participants and the racing public unless we establish a commercially viable Brisbane Metropolitan Racing operation, by merging with QTC. BTC will suffer a loss for the 2007/08 financial year in excess of $1 million and its future viability as a race club is of serious concern to the Board.

In recent years a substantial contributor to the BTC’s financial result has been the fair value gains on the Club’s share market portfolio. In 2005/2006, out of a profit of $525,000 there were share market gains of $366,000. In 2006/2007 out of a profit of $1.52 million, the share market gain was $1.03 million. BTC members need to understand that these share market gains bear no relevance to the Club’s operating result or activities and without these gains the 2005/2006 and 2006/2007 profit results would have been only marginal.

So on one hand the club is telling its members that they can no longer rely on wagering distributions or revenue from racegoers attending the course, and on the other they are saying ‘well actually we have this great additional source of income, which is our investments, but the exceptional returns on them should be disregarded for the purpose of assessing the balance sheet because they are not related to wagering distributions or revenue from racegoers.

Huh? How does that work?

Income from interest on investments is counted as revenue in every company in the world, every day of the week, as are increases to the value of the investment holdings.

So why are the BRC Directors pushing so hard to have this income derecognised?

Because they want the merger to go ahead, just like not long before they wanted to sell Doomben lock stock and whimpering barrel that’s why.

The fix is in.

BTC members have, on several occasions over the past 18 months, been provided with a wide range of views and information on the possible impacts of a merger between BTC and QTC, and importantly, what that might mean for the long-term future of the Doomben Racecourse. The primary theme that has remained constant throughout this whole period is an almost unanimous view among members of BTC (and, for that matter, QTC) that the Doomben Racecourse is (and must continue to be) an integral part of the Brisbane Metropolitan Racing.

The current BTC Board is unanimous in its position that the Doomben Racecourse must be retained.

Oh yeah really?

The Board members forgot to tell their members one little detail, that being that the BTC Director’s initial position on the sale of their racecourse Doomben was sell! sell! sell! This below is from the minutes of a 2009 meeting of the then principal racing control body Queensland Racing Ltd.

The fix was well and truly in long before this nonsense was being spouted. In November 2007 a vote on the merger returned a ‘No’ vote, and shortly afterward the board resigned en masse. A new board was duly appointed (by whom I don’t know, I was working in NZ at the time and missed it) but history has shown that the new mob – which included Mr Winx Peter Tighe, soon to be RQ Chairman Kevin Dixon, and my great critic Ross Tinniswood – were yes men sent in to do a job on the members and on the truth, and they did it.

The first act of the new board was to show the world that they didn’t have a clue how to run a race club by calling in consultants from top of town firm BDO Kendalls to tell them what to do.; and the first thing that the consultants told them was that they should sell all their income producing assets.

Huh again? Cut off your income stream, cross your fingers and pray to God that some ongoing revenue might fall from the sky. What type of logic is that?

It’s not. It’s a con job and the first Ace in a three card trick. The morons had a sh*tload of share holding assets that only the year before returned the Brisbane Turf Club a million dollars in dividends and then, quite inexplicably and absolutely extraordinarily, at the height of the Global Financial Crisis (remember the GFC?). at a time when the value of the share market has been temporarily slashed by 2/3rd’s, they decided to sell the whole portfolio. WTF? This how they spun it to members.

When the Australian Stock Market fell dramatically late last year, the investment portfolio suffered immensely. The BDO Kendalls report confirmed the investment portfolio incurred total losses upwards of $800,000 over a three month period from November 2007 until January 2008. These losses offset much of the gains made in the previous two years, to the point where the volatility was deemed to be outside the risk appetite of the Club.

A decision was then made on 23 January 2008 to liquidate the portfolio, crystallising a loss of $581,000 for the 2007/08 financial year. The overall return (net of commissions paid to St George Bank) since its inception in October 2005 was $876,000 (5.82% pa).

It was bald-faced bullsh*t.

How could net gains of $1.4 million in the asset portfolio be mostly obliterated by an $800 000 drop in share values caused by what any kid who had studied Year 9 Economics knew was simply a serious but cyclical event?

It’s a rhetorical question of course, because simple maths tells you that by any calculation 14 minus 8 equals six, and so at the very height of the GFC the BTC’s share portfolio was still worth $600 000 more than it had been just 2 years before. AND the investments had returned just under half a million in cold hard cash by way of interest and dividends.

Only a bunch of absolute morons would sell such an income producing beast, and only a raving lunatic would sell it at the absolute bottom of the market when share prices were at their lowest ebb in at least 30 years and quite possibly a hundred. But that’s exactly what the BRC Directors did. They sold the lot, and as you would expect the club and its members took an absolute bath on the fire sale price, and then got burned again when the club put the scraps of proceeds in the bank at a time when interest rates were lower than they had been in half a century.

The BTC Board has also decided that the most prudent use of the Club’s surplus cash reserves from now on is to invest those funds on Bank term deposits and to keep members’ funds out of the share market.

Were the new board morons? The jury is out on the Tin Man, but in the main the answer is no. Were they raving lunatics? Again it’s arguable, but again I will say no.

So why did they do it?

Easy: because the Directors (below) were deliberately running the finances of the club down so as to put members in a position where they were made to believe that they had no alternative but to vote for the merger.

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